stamp duty clawback question

R

reds

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I understand that I'll have to pay stamp duty clawback if I rent my apartment to tenants (I was a first time buyer when I bought it last year and didn't have to pay any stamp duty at the time)
However, can anyone explain to me how this works and how it's paid?
To be honest, I have a few friends who have done this and none of them have paid any stamp duty clawback, and some of them aren't even aware that this clawback existed.
So who comes a-looking for the money, do they come looking for the money, and when?
 
It's self assessment. The Revenue come looking if and when they have compiled enough evidence to convict. 5 / 10 years, it doesn't bother them since they'll be charging you interest and fines.

You'll also have to pay interest already since you were meant to have paid the stamp duty from the date you started renting out. This is charged on a daily rate.

Also, have you registered with the PRTB? There are fines/prison time associated with non-registration.

Also, also, are you paying tax on your rentmal income? There are fines + interest / prison time associated with non-payment.
 
They will come looking eventually.
My brother paid the clawback last year. He contacted revenue and they worked it out for him.
He had lived in his apartment for 1 year. If you move back in before you have owned (not rented) the place 5 years you dont have to pay the clawback, so they dont chrge you interest on anything unless you have owned it over the 5 years and have not moved back in. You pay stamp duty at the rate you would have paid when you bought it and you MUST pay tax on profits from your rental income.
 

This may help http://www.askaboutmoney.com/showthread.php?t=29487

reds said:
To be honest, I have a few friends who have done this and none of them have paid any stamp duty clawback
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Does not make it right, does it? They will eventually have to pay with penalties on the top of that..
Revenue has been workign hard over the past year or so to catch these people. . And believe me, Revenue will not be the one left out of pocket... Penalties and interests are applied. It is just a matter of time.
They are coming to get you!!!!
 
In relation to the tax on profit from rental income there are a number of allowances that can be deducted in calculating the profit the main one being interest on the mortgage. See [broken link removed] for allowances allowed and how profit is calculated
 
Hi Reds,
Im in the same position as yourself and posted about it yesterday. There was a very helpful response from asfdg so it might be a useful read for you.

http://www.askaboutmoney.com/showthread.php?t=30006

By the way, I would advise you to use an accountant, he/she'll help you calculate what you owe in tax (on rental income), stamp duty, and what you can off set against it.
 
Thanks for all your replies on this.
For the finger-waggers above (!) I haven’t rented my apartment out yet, I was just thinking about it and I wanted to know the ins and outs first.
But I have to say that after discussing this over a few pints last night NONE of the people I know or know of who rent out their houses has paid a cent in clawback and believe they never will.
I’m too pessimistic to think I’d get away with it so I’d have to do it all above board!
 
reds said:
But I have to say that after discussing this over a few pints last night NONE of the people I know or know of who rent out their houses has paid a cent in clawback and believe they never will.
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They sound pretty naive to me reds. In a way I can understand their attitude (understand not agree) as the PRTB are really only getting going. But as more and more landlords become registered and more and more tenants insist on their landlord registering these people will have no choice and will have to register. They have RSI numbers associated to their names and purchases and its a very simple matter for the revenue to work out who owes what and charge interest.
 

You could very well be buying them a pint in a few years over which they can drown their sorrows!

You're doing the right thing, and the sensible thing as well.
 
sorry was thinking about OP friends rather than the OP. assumed that if they are unaware of stamp duty claw back doubt they are declaring rental income. have to blame concentration on the weather i suppose.
 
The majority of these 2nd property merchants,would have 2 mortgages taken out with the banks.One on the ppr and the other on their investment property,now who was it that hung all the offshore account/Dirt tax evaders out to dry with the revenue,yes folks the Banks !.
When the revenue decide to go after these boys in a big way,it will be like dropping sticks of dynamite into a barrel,because the banks are going to drop them all in it anyway.
 
Lads...i am moving to oz and i am in the same situation. i am seriously thinking about forgetting the sd clawback as it is simply too expensive.i know loads of people who have done the same thing and have never been chased by the revenue. a lot of people dont even think about stuff like this and they just sail on and never get caught. For me to pay it would involve remortgaging the property and it is just a load of hassle.....
 
You should consider renting it out as you only pay 20% of rental income in tax if you are outside the EU(?) and its up to the tenants to pay this.

 

All the best with that, just don't come on here crying about the tax and penalties if you are caught later on.

Are you sure you can deal with the hassle of a job over there, or will you just sponge of the Aussie State when you get there?

P.S. when your tenants claim rent relief, the Revenue will then have your details.
 
reds said:
I understand that I'll have to pay stamp duty clawback if I rent my apartment to tenants
Click to expand...

If you intend on living in the apartment, and sharing it with tenants under the rent a room scheme, there may be no clawback.

Otherwise, if the apartment was new, then when calculating the clawback, you can discount 13.5% VAT, which may put you in a lower stamp duty bracket, and possibly eliminate stamp duty altogether.

If you don't register with the PTRB, you can't claim interest relief on your mortgage against your rental income. Registration is €70, but can be offset against rental income.

J.
 
well ccovitch...i am not sponging off the aussie state as i already have a job with my company over there...it is purely a temporary situation and that is why i think it is worth the risk. i wont be crying if i do get caught as it is a calculated risk and the potential returns outweigh costs if i do get caught.
 
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